When I format the 13 GB drive, DOS reports 12417 MB instead of 13021 MB.
Yes, many operating systems define a megabyte as 1,048,576 bytes (2^20, binary number) instead of 1,000,000 bytes (10^6, decimal number). Hard drive manufacturers normally use a decimal number to describe drive capacity.

For your drive, divide 13021 MB by 1,048,576 and you get 12417 MB.

A long version of the above information can be found from the National Institute of Standards and Technology web site at http://physics.nist.gov/cuu/Units/binary.html:

Motivation for the proposed prefixes for binary multiples

Once upon a time, computer professionals noticed that 2^10 was very nearly equal to 1000 and started using the SI prefix "kilo" to mean 1024. That worked well enough for a decade or two because everybody who talked kilobytes knew that the term implied 1024 bytes. But, almost overnight a much more numerous "everybody" bought computers, and the trade computer professionals needed to talk to physicists and engineers and even to ordinary people, most of whom know that a kilometer is 1000 meters and a kilogram is 1000 grams.

Then data storage for gigabytes, and even terabytes, became practical, and the storage devices were not constructed on binary trees, which meant that, for many practical purposes, binary arithmetic was less convenient than decimal arithmetic. The result is that today "everybody" does not "know" what a megabyte is. When discussing computer memory, most manufacturers use megabyte to mean 2^20 = 1,048,576 bytes, but the manufacturers of computer storage devices usually use the term to mean 1,000,000 bytes. Some designers of local area networks have used megabit per second to mean 1,048,576 bit/s, but all telecommunications engineers use it to mean 10^6 bit/s. And if two definitions of the megabyte are not enough, a third megabyte of 1,024,000 bytes is the megabyte used to format the familiar 90 mm (3 1/2 inch), "1.44 MB" diskette. The confusion is real, as is the potential for incompatibility in standards and in implemented systems.

Faced with this reality, the IEEE Standards Board decided that IEEE standards will use the conventional, internationally adopted, definitions of the metric prefixes. Mega will mean 1,000,000, except that the base-two definition may be used during an interim period if such usage is explicitly pointed out on a case-by-case basis.

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